Frank Sinatra might have crooned the songs that make the world sing, and Steve Jobs may very well single-handedly create the toys that make the world shop, but nobody (but nobody) can set the price of real estate, not even your agent. That, my friend, is the market’s job.
Buyers may well look suspiciously at a house with a price that is frequently, and incrementally, being lowered.
So with a glut of housing on the market and home sales currently slumping, many would-be home sellers are having to stare down that dirty word: repricing. And even though it may hurt—and chances are that slashing the price of your home is going to—adjusting your asking price may be a necessary evil if you want offers to start coming in.
And if this realization comes after the economic equivalent of watching tumbleweeds blow through your living room for the last six months, well, you might have waited a bit too long to adjust your expectations.
"What I do is essentially redo the market analysis about every 30 days and look at what is sold, and more importantly, what has gone under contract," says Lori Chapman, a Realtor with Real Estate III. Markets change fast, so it’s important to keep an eye on homes similar to yours, to see what they’re selling for and to understand at what price buyers are willing to write contracts.
This is information that is constantly changing, so the more up-to-date the data is, the better. And upon seeing that data, some steely-eyed realism is essential.
"What we try to get people to focus on is that they or we don’t set the price of the market," says Chapman. "You have to look at the market data and price according to that. You can’t look at what you’d like, or what the agent would like, or even what a buyer might like. You need to look at market facts."
Median home prices have essentially remained the same from the second to the third quarter, though according to the Charlottesville Area Association of Realtors, sales are at their lowest point since 2003. But thanks to low interest rates (which just seem to be getting lower), buyers have a growing incentive to move aggressively. The trick to netting a sale, though, is pricing your home right.
And sometimes, this means pricing your home right after you’ve priced it wrong.
After taking a close look at what homes like yours are fetching (number of bedrooms, square footage, acreage, age, etc.) price it firmly in that range. Buyers may well look suspiciously at a house with a price that is frequently, and incrementally, being lowered. As real estate blogger Jim Duncan says in his post on repricing, "Beat the market down, don’t chase it."
Of course, you won’t have to dance with an ever-changing market as much if, as the advice goes, you do it right the first time.
"It’s always more desirable to get yourself close to the correct price the first go-around," says Chapman. "If you misjudged it, it’s more difficult in a changing market."
And no matter what anybody tells you, the market, forever changing, is in charge.